China’s Soy Crush Increasing
JCI reported China’s weekly soy crush increased 166,000 tonnes from the previous week to just over 2.2 million tonnes.
Crush was up 5% from last year and was the largest in 2021, even though crush margins remain negative.
Processors are increasing rates as imports climb, but deferred purchases have slowed.
Meal stocks at ports are holding relatively steady at 1.1 million tonnes.
Total crush for 2020/21 is estimated at 70.5 million tonnes, up 3.6 million from last year.
The USDA has lowered China’s bean import projections, but left the crush forecast unchanged.
FBN’s Take On What It Means: After front loading its bean import program China’s old-crop purchases have been limited. Domestic demand has not recovered as much as expected, despite the rebuilding of hog herds and higher poultry numbers, and China may export more soymeal in the near term. However, once processors work through recent arrivals, we expect demand for new-crop to pick up and be supportive to prices.
French Wheat Crop Higher
FranceAgriMer projected a sharp rise in French soft wheat exports and stocks as a rebound in production is expected.
Soft wheat exports outside the EU were forecast at 10.5 million tonnes for 2021/22, up 40% from 7.5 million in 2020/21.
Soft wheat exports within the EU were projected at 7.3 million tonnes, up 22% from an estimated 6 million last year.
The farm ministry estimates 2021 soft wheat production of 37.1 million tonnes, up 27% from last year.
Soft wheat stocks at the end of 2021/22 are projected to reach 3.7 million tonnes, up nearly 39% from 2.7 million in 2020/21.
Despite heavy rain that has slowed early harvesting, crop damage was reported to be limited.
Forecasts of drier, warmer weather by the end of the week are easing concerns.
FBN’s Take On What It Meansr: Wheat supplies are expected to be higher for many origins outside of North America. Higher freight costs could help French exports to nearby destinations around the Mediterranean, but limit shipments to China. Larger demand for wheat in domestic feed rations will also be supportive.
FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)
The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.
